Authors' reply to discussant's response: An investigation of a measurement based approach to the evaluation of audit evidence;

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Authors' Reply to Discussant's Response
An Investigation of a Measurement Based Approach
to the Evaluation of Audit Evidence
Theodore J. Mock and Arnold Wright
The purpose of this reply is to help clarify the scope and objectives of our paper. Many of Professor Ward's comments appear to have resulted from a confu­sion
as to the intended purpose of the paper. Thus, a restatement of the objectives of our study seems warranted. Additionally, we would like to take the opportunity to respond to a number of other important observations by Ward.
Purpose of the Study
Ward begins his discussion by a consideration of the goal of an audit and the issue of measuring audit and firm performance. He states that audit performance should be judged by three criteria:
(1) appropriateness,
(2) efficiency, and
(3) effectiveness.
Ward concludes that the approach presented in the paper "seems to reduce this (audit performance) goal to a single criterion measure—success or failure in verify­ing
or refuting financial statement assertions.''
To restate, the primary focus of the study is stated in our paper to be "... to investigate the usefulness of a measurement based approach as an integrative, operational process to evaluate audit evidence '' (emphasis added). The specifica­tion
of appropriate performance measures for an audit of a firm, although impor­tant
issues, are outside the scope of the study. Given that auditors must evaluate the competency of evidence to establish reliance on such information, the study advances an approach that may be used to systematically judge the relative qualities of various evidence sources.
Ward's three audit performance criteria are enlightening; however, there does not appear to be a consensus among practitioners or academics that such criteria are sufficient. Scholars have wrestled for many years with the appropriate goals for the private enterprise firm itself, e.g., profit maximization, survival, maximizing firm share prices, societal responsibilities. There continues to be wide disagree­ment
as to the proper objectives for the firm. Then, what are the chances that ac­countants
would agree on the criteria established by Ward? Are there other im­portant
criteria that should be considered such as ethics or development of staff? What about the difficulties of weighting the relative importance of the criteria themselves? Additionally, Ward's criteria are vaguely defined and do not appear operational. For example, how is "appropriateness'' to be measured?
The measurement based approach does not ignore the importance of multiple
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